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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:The Demand for Funds from Rural Credit Unions in Togo
Authors:Baydas, Mayada M.
Cuevas, Carlos E.
Periodical:Savings and Development
Geographic term:Togo
Subjects:agricultural credit
credit cooperatives
Economics and Trade
Development and Technology
Abstract:This paper analyses the demand for funds by rural borrowers in the semiformal institutional framework of a credit union movement and the extent to which price components influence credit allocation, using data provided by a baseline study of the Togo credit union movement in 1987, which involved 395 rural household interviews. A total of 137 observations representing farmer-borrowers who had access to credit union loans, are used as the data base for analysis. The findings suggest that in credit unions transaction costs and loan price do not play the rationing role they play in other lending institutions. The close relationships in rural communities provide direct access to information indicating an individual's creditworthiness which is a natural resolution for credit allocation problems. Nonetheless, the credit union's rules of proportionality between deposit holdings and loan amounts appear to dominate the factors determining loan size. Thus it can be concluded that loan size rationing through the proportionality rule is the prevailing type of credit rationing in Togo credit unions, while risk-related factors influence the level of borrower transaction costs. Bibliogr., sum. in English and French.